The Administration has a deep and long-standing commitment to empowering
and promoting the independence of people with disabilities, including
removal of barriers for them to work. While the Administration supports
H.R. 1180, there are policy and funding concerns that must be addressed.
The President endorsed similar legislation last year, funded the proposal
in his FY 2000 Budget, and urged the Congress to pass it in his State of
the Union address. In addition, on several occasions, he has renewed his
challenge to the Congress to pass legislation so that people with
disabilities can work without fear of losing the health care they need.

The Administration, however, does remain seriously concerned that H.R. 1180
fails to provide certain key supports for individuals with disabilities who
are returning to work that were included in the President's FY 2000 Budget
as well as in the Senate-passed and House Commerce Committee versions of
the bill. In particular:

H.R. 1180 does not include the provision in the House Commerce
Committee- and Senate-passed bills that lifts the income and resource
restrictions on the Medicaid buy-in option. This provision gives States
more flexibility in designing their programs and allows people with
disabilities to take middle-class jobs without losing the option to buy
into Medicaid.

H.R. 1180 has inadequate funds for a demonstration program to provide
Medicaid coverage to workers with medical conditions that could cause
them to require cash assistance in the future. Fully funding this
program with mandatory appropriations is critical to assure
implementation and to obtain State support for efforts to encourage
individuals with disabilities to return to work. The President's FY
2000 Budget included Medicare and Medicaid offsets for this purpose, and
we will continue to work aggressively with the Congress to identify
appropriate offsets.

H.R. 1180 gives no guarantee that Medicare coverage will always be
available to people with disabilities who work. The Administration
urges that this guarantee be restored.

In addition, the Administration opposes the provision (Section 409) in H.R.
1180 that would modify the formula for calculating lender and secondary
market interest payments on Department of Education guaranteed student
loans. This change would undermine the HEA agreement on lender yields made
just last year. The proposal would significantly increase lender and
secondary market profits by transferring economic risk -- and potential
cost -- to the Federal government while providing no additional benefits to
students.

Americans with disabilities can and do bring tremendous talent and energy
to the American workforce. We must not put people with disabilities in the
untenable position of choosing between health care coverage and work. The
Administration looks forward to working with the Congress to enact landmark
bipartisan legislation that takes a significant step towards improving work
opportunities for people with disabilities by increasing their access to
health care and employment services, while assuring that the bill's
financing is adequate and based on sound policy.

Pay-As-You-Go Scoring

H.R. 1180 would affect direct spending and receipts; therefore, it is
subject to the pay-as-you-go (PAYGO) requirement of the Omnibus Budget
Reconciliation Act of 1990. The Office of Management and Budget's
preliminary scoring estimate for the bill is under development.